Doc-Led ACOs Better Model for Saving $$$

WASHINGTON — Physician-led accountable care organizations (ACOs) could have more opportunities to create savings in patient care with a little help from health insurers, a leading health reform expert said Wednesday.

Doctor-centric ACOs can do a better job at controlling costs than hospital-led organizations, Paul Ginsburg, PhD, president of the Center for Studying Health System Change here, said at an ACO summit hosted by America’s Health Insurance Plans.

Entrepreneurial insurance companies can offer loans to provider groups to expand or re-engineer to become ACOs through Medicare or commercial payers, Ginsburg said. Others can create innovative programs that have physicians take additional risk to improve outcomes and lower costs for patients.

“I think physician-led ACOs inherently make markets more competitive because they have an opportunity to shift patients toward higher-value hospitals,” Ginsburg said. “It means that a hospital market that might not have large competition going, all of a sudden, if there’s a physician-led ACO, those hospitals have to compete on price for the allegiance of those physician-led ACOs.” Unlike in hospital-led ACOs, doctor-led ACOs aren’t compromised financially by reducing hospital admissions and emergency department visits, he pointed out.

In fact, physician-led ACOs already outnumber their hospital counterparts, the latest data from the Centers for Medicare and Medicaid Services (CMS) show. However, doctor-organized groups typically treat fewer patients than those formed by hospitals.

Charlie Baker, former Secretary of Health and Human Services Secretary in Massachusetts, noted that nearly every shared-risk model in Medicare Advantage is with physician groups and not hospitals, he says, because insurers know that’s how to save money.

Baker said he believes there will be more growth in small providers pooling resources to become ACOs. “My big fear is they’re starting behind the larger players, way behind,” Baker said. Physician groups are still skeptical of quality metrics used to determine the shared savings in ACOs, Ginsburg said.

However, CMS rules on ACOs favor hospital-led organizations. “The CMS rules are making it exceedingly difficult for an independent physician group to form an ACO,” Baker said. To that point, Ginsburg noted the federal government can play a larger role in facilitating physician-led ACOs.

“I think of the federal support for the HMOs in the 1970s as to whether it’d be feasible to have the federal government support the development of physician organizations as an investment for viable markets in the future,” Ginsburg said.

No matter what happens, whatever strategy emerges to control costs must tackle provider payments — an area public and private payers seem to be in agreement on.

Jeff Goldsmith, PhD, professor of public health sciences at the University of Virginia in Charlottesville, called for more physician independent practice associations and doctor-sponsored health plans. He doesn’t believe hospitals should be the center for managing clinical risk in the health system.

“I think hospitals have an valuable important role to play, but to assume they’re going to voluntarily shrink their own franchise defies belief,” Goldsmith said.